Future Plc · LSE:FUTR
Future — Investor Day (February 2020)
151 slides from Future's investor day presentation, Feb 6, 2020
Slide 1: Future PLC Capital Markets Day
Future PLC Capital Markets Day 6th February 2020
Slide 2: Today's Speakers
Today’s Speakers Zillah Byng-Thorne Penny Ladkin-Brand Kevin Li Ying Aaron Asadi Marcus Adolfsson Chief Executive Officer Chief Financial Officer Chief Technology Officer Managing Director of Senior Vice President, eCommerce Future Labs Chris Convey Matthew Pierce Sam Barcroft Kevin Michaluk Senior Vic
Slide 3: Agenda
Agenda Execution of 3:00pm Acquisition 4:30pm strategy Playbook Chris Convey Zillah Byng-Thorne New Video Revenue 4:50pm Importance of 3:15pm Sam Barcroft diversification Marcus Adolfsson Organic growth 3:25pm Global operating 5:00pm through audience model Kevin Michaluk & Aaron Asadi Penny Ladkin-Br
Slide 4: Execution of strategy
Execution of strategy Zillah Byng-Thorne Chief Executive Officer 4
Slide 5: Delivering sustainable growth
Executive Summary Delivering sustainable growth A tried and tested four-step process to deliver sustainable organic growth over the long term. The Future Horizon Focussed Annual Playbook Planning Execution Planning & Organisational Ensuring the Once aligned and Review Business Overview & Growth Stra
Slide 6: The Future Playbook
The Future Playbook 6
Slide 7: The Future Playbook
The Future Playbook 1 Why do we exist? Our Purpose 4 How will we succeed? Our Strategy 2 How do we behave? 5 What’s important Business Overview & Growth Strategy Our Values right now? Our Current Plan 3 What we do? Our Business Model 6 Who must do what? Our Responsibilities 7
Slide 8: Why we exist: Our Purpose
Why we exist Our Purpose We change people’s lives through sharing our knowledge and expertise with others, making it easy and fun for them to do what they want. The Future Playbook 8
Slide 9: How we behave: Our Values
How we behave Our Values We are part of the audience and their community. We are proud of our past and excited about our future. We all row the boat. It’s the people in the boat that matter. The Future Playbook Results matter; success feels good. Let’s do this! 9
Slide 10: What we do: Our Business Model
What we do Our Business Model We entertain, inform and engage our audiences with content that connects in specialist verticals via magazines, websites, email, video and events; we monetise this via paid-for content, media advertising sales, ticket sales The Future Playbook and eCommerce. 10
Slide 11: How we will succeed: Our strategy
How we will succeed Our strategy Future is a global platform for specialist media driven by technology with diversified revenue streams. We create loyal communities and fans of our brands by giving them a place they want to spend their time and meet their needs. We diversify our monetisation models t
Slide 12: What's important right now: Our 2020 Plan
What’s important right now Our 2020 Plan We execute our strategy through a series of intentional steps, we call this ‘what's important right now’. Be #1 Become the global leader in our specialist markets, growing our audience through content and platform. Horizon 1 Unlock new brand potential Deliver
Slide 13: Who must do what: Our Responsibilities
Who must do what Our Responsibilities A core part of the strategy is alignment of objectives and performance management. We focus on helping everyone be their best self at Future, while aligning our rewards such that success is based on Future The Future Playbook performance rather than the individu
Slide 14: Horizon Planning
Horizon Planning FuTURE
Slide 15: McKinsey Planning Horizons
Mckinsey Planning Horizons CREATE OPTIONS FOR FUTURE BUSINESS NURTURE EMERGING BUSINESS FOR By determining TOMORROW’S CASH FLOW “what's important HORIZON 3 GENERATE right now” we TODAY’S CASH FLOW, DEFEND 24 TO 36 MOs. ensure we focus on AND EXTEND CURRENT BUSINESS growth for today HORIZON 2 GROWING
Slide 16: Focused execution
Focused execution FuTURE
Slide 17: Same principles, greater ambition
Same principles, greater ambition The principles which underpin our strategy have not changed since 2016: be a market leader, grow revenue streams organically, and accelerate growth with value add acquisitions. Only our ambition is greater. Focused execution 17
Slide 18: A series of intentional steps
A series of intentional steps What’s important right now Our strategy is broken into a series of intentional steps each year, this is what’s Important right now. Ongoing execution demands that today’s activities are aligned with tomorrow’s ambition. Focused execution 18
Slide 19: Execution of 2020 strategy
Execution of 2020 strategy Underpinned by four core pillars Grow our existing Launch new brands Continued Ongoing brands and & verticals diversification Investment audiences Extension into new categories on Scalable, lean and robust platform, Acquisition of SmartBrief Acquisition of Cycling, MoNa and
Slide 20: Fast scaling: alignment of culture
Fast scaling Alignment of culture A fast-scaling business means we need people to hit the ground running, identifying quickly who will fit from a culture and capability perspective. We might not be right for everyone, and that’s okay We use a number of tools to identify Future Pirates, from personali
Slide 21: Executing our current plan: Be #1
Executing our current plan Be #1 No.1 Already No.1 Organic growth UK 2m UK & US 3m underpins our 3m 3m leadership positions, while acquisitions 900k accelerate the 100k strategy FY17 FY18 FY19 FY17 FY18 FY19 Photography Global Online Users Creative Global Online Users No.1 US 130m No.1 US 32m 30m Sp
Slide 22: Unlock new brand potential
Executing our current plan Unlock new brand potential We take existing brands and unlock their full potential. Focused execution 22
Slide 23: Supercharge the support
Executing our current plan Supercharge the support Our operating model delivers efficiencies which enable us to optimise our core business and acquisitions. ?? Focused execution 23
Slide 24: Evolve the Future Wheel
executing our current plan Evolve the future wheel We have 9 meaningful revenue streams. Service & Service Others & Others 6% Events 16% 7% Digital Ads We grow new revenue Indirect Membership & Subs streams both organically 8% Print and by acquisition, at a 20% Advertising 20% Content constant rate.
Slide 25: Acceleration of our strategy via M&A
Executing our current plan Acceleration of our strategy via M&A The right acquisition for Future is one we believe can uniquely create additional value while accelerating our strategy Ability to add value Clear criteria Speedy integration Use data and analytics to identify Clear investment criteria
Slide 26: Constant review to ensure timely course correction
Constant review to ensure timely course correction 26
Slide 27: Established business planning cycle and review
Established business planning cycle and review Annual Strategy Quarterly Business Refresh Reviews Review of performance vs What’s Strategy check-in Important for year Investment review Update of strategy based on market factors What's important right now update Agree new year What’s Important New ne
Slide 28: Summary
Summary Clear strategy, aligned with organisation, with a focus on execution and results. Constant review to ensure timely course correction Strategy Alignment Execution Scalable platform Blend of people Go to market fast + technology + processes Focus on short and Ability and agility to pivot as me
Slide 29: Importance of Diversification
Importance of Diversification Marcus Adolfsson Senior Vice President, Future Labs 29
Slide 30: More spokes and more wheels
Delivering more spokes & more wheels is core to Future’s strategy Diversified Diversified Diversified Footprint Verticals Revenue Importance of Diversification Streams 30
Slide 31: Diversification allows us to approach any challenge
Diversification allows us to better approach any challenge. Strong Strong Defence Offense Against the impact of Seeding Horizon 3 Importance of Diversification detrimental changes opportunities that to any one revenue enable continued stream organic revenue growth 31
Slide 32: Diversified Footprint
Importance of Diversification Diversified Footprint 32
Slide 33: We run our operations across two geographies
We run our operations across two geographies Revenue from the US is now at 54%, up from 31% in 2018, demonstrating our ability to materially diversify geographically. 46% 54% UK US Reduces risk from political or economic instability in any particular region Diversified Footprint US organic growth hig
Slide 34: Partners extend audience to non-English markets
Partners extend audience to non-English markets Unlike other media publishers Asia Europe who only license their brands, India Danmark we provide our partners with UAE Suomi complete systems, similar to a Singapore Norge franchise model. Bahrain Sverige Three new partners in India, Benelux Kuwait It
Slide 35: Diversified Verticals
Importance of Diversification Diversified Verticals 35
Slide 36: Creating content across many verticals
Creating content across many verticals 12% Through diversification, Other 64% of revenue now comes from outside of Technology 15% 36% vertical. B2B Technology 4% Photography Launching multiple brands within a vertical enables “Search 1-2-3” strategy 5% Home Interest Diversification across multiple con
Slide 37: Our scale
Our scale An average month at Future in 2019 10,000 9,000 14,000 8,000 Published pieces Updated existing Posted pieces of Published of new written pieces of written content to social newsletters content content platforms 600 78 4 Published Published magazine Hosted major videos and bookazine issues
Slide 38: Hobbies & Knowledge
Hobbies & Knowledge +10% 12% Organic Online of FY19 Revenue Audience FY19 Vertical lead by Live Hobby brands such as Science and Space.com. BikePerfect offer Space is exciting again! significant eCommerce growth opportunities Diversified Verticals 38
Slide 39: Photography
Photography +331% 4% Organic Online of FY19 Revenue Audience FY19 DigitalCameraWorld.com The Photography Show is the number one remains the largest photography website in photography exhibition the UK and number two in the US in the UK and attracted over 32,000 visitors last year Diversified Vertical
Slide 40: Home Interest
Home Interest +41% 5% Organic Online of FY19 Revenue Audience FY19 Delivered significant The Homebuilding & audience and Renovating Show is the ecommerce growth on number 1 homebuilding Realhomes.com! show in the UK with Diversified Verticals over 100,000 attendees 40
Slide 41: Games & Entertainment
Games & Entertainment +31% 10% Organic Online of FY19 Revenue Audience FY19 GamesRadar+ last year PC Gamer is the grew its audience by number 1 global PC 72% gaming website Diversified Verticals 41
Slide 42: Technology
Technology +28% 36% Organic Online of FY19 Revenue Audience FY19 56% w/ acquisitions Number 1 consumer Continuous stream of technology publisher in new content UK and US online opportunities, 5G, streaming Diversified Verticals 42
Slide 43: Music
Music +42% 7% Organic Online of FY19 Revenue Audience FY19 The music vertical caters Guitarworld and to the needs of both MusicRadar holds 2 and music fans and 3 positions in Music musicians themselves Making websites in the UK and US Diversified Verticals 43
Slide 44: B2B
B2B Technology | Media | Entertainment | Prosumer | Education +20% 15% Online Audience of FY19 Revenue FY19 9% Organic ~25% on pro forma basis Connects advertisers Audience smaller but with decision makers by more valuable on per delivering exclusive user basis industry insight Diversified Verticals
Slide 45: Diversified Revenue Streams
Importance of Diversification Diversified Revenue Streams 45
Slide 46: Nine significant revenue streams at different stages of maturity
Nine significant revenue streams at different stages of maturity We continue to invest in higher margin Horizon 1 revenue streams Service & Service Others & such as eCommerce, which grew Others 6% Events organically at 73%. 16% 7% Digital Ads Membership Indirect & Subs Over 70% of revenue now outside
Slide 47: Formalize the internal development of new revenue streams
Formalize the internal development of new revenue streams FUTR Labs has built a playbook that industrializes Horizon 3, by identifying opportunities and then cost effectively innovate the idea into a minimum viable product. Rapidly try a lot of things Ideas come from Graduate! everywhere Becoming a
Slide 48: Off Platform eCommerce
Future Labs Off Platform eCommerce Syndicating our recommendation content to partners, such as retailers. Diversified Revenue Streams Launch partner of Amazon’s Additive revenue as the syndication program, where users’ search journey started our recommendations lives on Amazon. inside Amazon’s search
Slide 49: Scaling Lead Generation
Future Labs Scaling Lead Generation Capturing in-market customer information and monetizing it multiple times at high cost-per-lead. Future’s advantages: Targeting our growing B2B Diversified Revenue Streams vertical as a priority. High Authority Brands Scale lead gen business Content Expertise from
Slide 50: Summary
Summary Diversified Diversified Diversified Footprint Verticals Revenue Streams By running our operations 64% of revenue comes outside Nine significant revenue across the UK and US, we of the technology vertical, streams at different stages of reduce the risk from political such as hobbies, home maturit
Slide 51: Data-Driven Content Strategy
Data-Driven Content Strategy Kevin Michaluk Strategy & Execution, Future Labs 51
Slide 52: We are not like other publishers
We are not like other publishers, where editors exclusively determine what to write about and what to skip. Our data-led audience strategy helps us work out what our readers truly want to Data-Driven Content Strategy read and then our editors and creators work their craft to bring it to life with au
Slide 53: Our Target Audience
Our Target Audience Samsung Galaxy Watch vs Apple Watch? What are the best MicroSD cards for the Nintendo Switch? What’s the battery life on Beats Solo headphones? Our most valuable audiences have intent behind the content they are viewing. We’re not just holding their attention, but helping them ac
Slide 54: How we reach them
How we reach them Intent-based Feed-based Rewards Quality Catchiness Our results prove it is less volatile to scale quality content than it is to fight Need ‘Service me’ ‘Entertain me’ for attention. The best source for non-volatile and Data-Driven Content Strategy sustainable content is Reqs. Search
Slide 55: Continued Growth in Search
Continued Growth in Search Google’s search algorithm aims to surface the highest authority, 90m highest quality content and sends the user to our websites. 40m Data-Driven Content Strategy Legacy Future site sessions driven from search engines Oct 15 Algorithm update Sep 19 55
Slide 56: Data Leads Content Planning
Data Leads Content Planning We triangulate data from Retail Interest several sources to generate high potential SEO content ideas. Data SEO data shows us the lay of the land we are entering into. Consumer Data-Driven Content Strategy Retail interest data shows us the Insight volume of interest aroun
Slide 57: Content Architecture
Content Architecture Evergreen Content 19% Help & 38% Troubleshooting Not all content we Buyer’s Guide & Shopping $$ publish has the same Content revenue potential, $$$ however all content is designed to maximize Data-Driven Content Strategy $ 43% the effectiveness of our top earners. News & Editori
Slide 58: Today's Most Valuable Content
Today’s Most Valuable Content Revenue from shopping content compounds over time. Content paid for in 2017 still drove revenue in 2019. Q4 2019 Q3 2018 Q2 2018 Q1 2018 Q4 2017 Data-Driven Content Strategy Q3 2017 Q2 2017 Q1 2017 2010-2016 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 201
Slide 59: The Consumer Journey
The Consumer Journey Regardless of where a user starts their consumer journey, at some point during their research they’re likely going to pass through Google. Today’s consumer journey is non-linear and the user, not the Data-Driven Content Strategy marketer, is in control of it. 87% of shoppers now
Slide 60: Planning Content for the Consumer Journey
Planning Content for the Consumer Journey I want to Awareness How can I do? How does it work? Can I do? Interest When we focus on the needs of the consumer, What is the best? we win. Is it worth it? Consideration Users move through the consumer Data-Driven Content Strategy journey by making decision
Slide 61: We want to be the last port of call for your purchase decision
Addressable Audience / Consumer Pool We want to be the last port of call for your Awareness I want to How can I do? Best Tech to Lose purchase decision. Weight, Get Fit in 2020! Users move through the consumer Interest How does it work? journey by making decisions. Best Fitness Trackers with Can I d
Slide 62: Insights Drive Growth
Insights Drive Growth With the launch of Disney Plus we ranked #1 in Google for what became the most searched keyword in the US in 2019. A data insight in 2018 that streaming service content was trending prompted us Data-Driven Content Strategy to start covering this content in earnest. Building on
Slide 63: What We Learned
What We Learned A Data-Driven Content Strategy and Workflow Yields Many Paths to Continued to Growth. Our Target Audience How We Reach Them Data Leads Planning Our most valuable readers have Google is the most reliable We triangulate data from many intent. source from which to grow this sources to co
Slide 64: Adjacent Markets
Adjacent Markets Aaron Asadi Managing Director of eCommerce 64
Slide 65: Moving into New Markets is what we do
Moving into New Markets is what we do Unlike many other media 2020 businesses, we have never been restricted to certain categories or markets. Moving into new areas is what Future has always been about Started in just one market now in multiple markets across multiple platforms and territories This
Slide 66: How we assess
Adjacent Markets How we assess 66
Slide 67: Our compass is our audience
Acceleration of our strategy via M&A We know a lot about our audience because we are the audience – our games writers are gamers, our music editors are musicians, homes teams are homebuilders. We don’t just look outward for insight, we can look within. Our compass is our Making the most of audience
Slide 68: What we gather
What we gather Using our data and research, we are able to learn about our audience. Age Gender Territory Interests Opinions Travel Plans Preferred Propensity to Profession companies and spend retailers Credit card Eating and spend drinking habits How we assess Scale protects us against evolving adv
Slide 69: How we gain insights
How we gain insights We gain insight into products that might not otherwise be considered high on the list of a specialist consumer. Specialist sites a gateway for We see how products perform consumers to do more than on Google… before. …and how they convert on Gain insight into retailer-driven plat
Slide 70: How we use our insight
Adjacent Markets How we use our insight 70
Slide 71: The advantage of our domain authority
The advantage of our domain authority After 15+ years of answering questions well, our sites are trusted. This is an important part in our Proven ability to extend into recipe for success. You can’t new areas… cheat this – it takes time and expertise to achieve what we ...Tom’s Guide had zero have.
Slide 72: We win where others didn't
We win where others didn’t Tom’s Guide reaches millions of tech enthusiasts a month, but its previous owner never saw the opportunity in laptops. As part of the brand strategy, Future quickly: Identified key terms Tested in-category content Rapid expansion through freelance How we use our insight Emb
Slide 73: Does it make sense for our brands?
Does it make sense for our brands? T3 was Tech focussed but it has now steadily grown into a Lifestyle brand – with reach and engagement higher than ever. T3 launched as a Tech brand in From 100% Tech content to nearly 1996 half of its audience engaging with new categories such as Travel and Was a h
Slide 74: Where next
Adjacent Markets Where next 74
Slide 75: Where can we go next?
Where can we go next? Identify the Research commercial spend & opportunity competitors We believe there are Once we have a sense for where we can go, we then identify the Insight, sales and ecommerce teams will research spend and many, many more commercial opportunity. competitors new opportunities
Slide 76: Unlocking the TI Media potential
Unlocking the TI Media potential All these fantastic brands await us… Where next 76
Slide 77: We are in new markets right now
We are in new markets right now We are effectively targeting new adjacent markets to grow into. Launch of Streaming – Fitness – huge Increasingly Disney+ led to big audience global interest. involved with that massive driver on tech eg Apple interest brands. Watch, Peloton. converting to real succes
Slide 78: 5G is a New Next Big Thing
5G is a New Next Big Thing 5G is already becoming a high value category – and has yet to penetrate the mainstream. Future enjoys a Collaborative consumer leadership position in content strategy across tech phone coverage. brands. Surveyed thousands of Launched B2B-focussed 5G consumers and site, 5GR
Slide 79: New Markets, Same Process
New Markets, Same Process We are proud of our past, of everything we’ve done, but we know there is even more to come. Our established process ensures we are ready. Credibility Quality content Expertise Domain strength Proven platform Great SEO Where next Cross-company support 79
Slide 80: Living in Horizon 3: Today's growth from past initiatives
Living in Horizon 3 : Today’s growth from past initiatives Matthew Pierce Kevin Li Ying Brand Director Chief Technology Officer 80
Slide 81: McKinsey Planning Horizons
Mckinsey Planning Horizons CREATE OPTIONS Horizon 3 is where FOR FUTURE BUSINESS we make strategic bets which ensure NURTURE EMERGING we focus on BUSINESS FOR TOMORROW’S CASH FLOW long-term growth beyond today. GENERATE TODAY’S CASH HORIZON 3 24 TO 36 MOs. FLOW, DEFEND AND EXTEND CURRENT BUSINESS HO
Slide 82: Technology Innovation
Living in Horizon 3 Today’s growth from past initiatives Technology Innovation 82
Slide 83: Our tech stack
Our tech stack Assets Websites Monetisation Freelance Staff Tech Services Ecom Tech: Hawk Content Commissioning Ad Tech: Hybrid Web Platform Portal Source Vanilla New Content Reuse Email Monetisation Smartbrief Asset Content Scraping & Asset Storage 26 sites now on Curation Vanilla Technology Innova
Slide 84: Our operating framework to deliver organic growth
Technology Innovation: Our Operating framework to deliver organic growth STEERING OPERATIONAL Vision & Strategy Execution & Output ELT MONTHLY STEERING HYPOTHESES EXECUTION HBR OPERATIONAL (Audience / Ads Waterfall / (Audience / Ads Waterfall / Inform, discuss and alignment (Audience / Ads Waterfall
Slide 85: Lean value tree for agile development
Technology Innovation: Lean value tree for agile development What is our VISION purpose? Vision & Roadmap Does this Steering Platform Tech + UX .. .. .. strategy Adtech Strategy Ecom Tech Strategy Strategy support our vision? How can we HORIZON 1 HORIZON 2 HORIZON 3 HORIZON 1 HORIZON 2 HORIZON 3 HOR
Slide 86: Internal Systems: Source
Past H3 Initiatives Delivering Today’s Organic Growth Internal Systems Source Editorial content and asset management software allowing content commissioning, reuse with asset rights management capabilities. 2700 7.3m Technology Innovation commissioned asset library size content per month Increases e
Slide 87: Web Platform: Vanilla
Past H3 Initiatives Delivering Today’s Organic Growth Web Platform Vanilla Proven tech web platform supporting the growth of 26 core websites. In calendar 2019, In calendar 2019, 7 sites migrated 9 non-English + 2 Avg 12 weeks turn around per migrated English Technology Innovation site international
Slide 88: Adtech: Hybrid
Past H3 Initiatives Delivering Today’s Organic Growth Adtech Hybrid Scalable, flexible technology to deliver ad impressions volume. +19% Increase in Tom’s Guide +11% Increase in programmatic viewability % with Hybrid yields on Hybrid vs. Bordeaux (Future) or vs. RAMP (Purch)* Technology Innovation Im
Slide 89: Ecomtech: Hawk
Past H3 Initiatives Delivering Today’s Organic Growth Ecomtech Hawk Dynamic, robust technology to deliver best, cheapest product offer recommendation. 2,100+ Active affiliate merchants 25 Territories covered ~2,000 Technology Innovation Up to 1,500 API or asset requests per Product updates per second
Slide 90: Building the assets of tomorrow
Future H3 Initiatives Delivering Tomorrow’s Organic Growth Building the assets of tomorrow Intent Marketing tech Source 2.0 Diversifying our monetisation Expanding out rights option management capabilities A new lead generation tech asset Further boost productivity Build using technical expertise Mo
Slide 91: Brand Development
Living in Horizon 3 Today’s growth from past initiatives Brand Development 91
Slide 92: Our vertical targets help deliver our overall goals
Our vertical targets help deliver our overall goals 2016’s strategic goal was to become the #1 or #2 content provider globally in Technology & Gaming (digitally). 2016 2019 TechRadar became the UK’s biggest consumer technology site hitting 48m users in November. Along with MusicRadar, we now have th
Slide 93: No.1 In Games
No.1 In Games Supercharging decade-old legacy brands and reaching number 1 in PC Games. +216%* +232%* 22m GamesRadar 33.7m Online Sessions 2019 Online Users 2019 Aim: transform our scale Common content and profitability in management system Games, in turn materially empowered wider team to growing ou
Slide 94: Building the #1 photography site
Building the #1 photography site Building the #1 photography site with Digital Camera World. 2.7m No 1 Online Users 2019 UK ComScore 2019 Launched Strong affiliate revenues - Digitalcameraworld.com made possible with our July 2017 Hawk tech, editorial processes, ways of working, and efficient #2 in th
Slide 95: Optimising acquisitions
Optimising acquisitions Long-term brand development also applies to acquisitions. Optimisation is key to maximising returns. Optimisation enables Measurable across Loudersound.com us to make the most several key areas: demonstrates this out of our acquisitions model at work -Platform It means we rea
Slide 96: Louder
Louder The fourth fastest growing website in the UK from SEO. 110% No 4 Organic online user Fastest growing UK growth year 1 website 2019 Acquired Team Rock Replatformed and brands in 2017. migrated to Vanilla. Rebranded as Louder Optimisation meant Brand Development in March 2018. brand change, rep
Slide 97: Summary
Summary A consistent focus on our future goals, ensures sustained, ongoing growth today. Relentless focus on our Platform and content Approach is flexible: as strategy, underpinned work hand in hand. applicable to acquisitions with vertical objectives Efficiency and profitability and relaunches as lega
Slide 98: Coffee
Coffee Coffee Coffee FUTURE
Slide 99: Acquisition Playbook
Acquisition Playbook Chris Convey SVP B2B 99
Slide 100: How we realise our strategy
How we realise our strategy Organic Acquisitions Our acquisitions Growth complement and accelerate our organic growth, rather than replacing it. More Wheels & Spokes Acquisition Playbook 100
Slide 101: Key principles
Key principles We are an operating business that wants to find complementary acquisition targets to fast track growth. Selective Review Use the Robust playbook pipeline Very selective in what We hold ourselves to Playbook has been Robust pipeline & we go after & exec account, via learnings developed
Slide 102: Investment Targets
Investment Targets As part of our 3 year Home Interest planning, we identify gaps in our portfolio or plans Operationally Transformationally that could be solved Strategic Strategic by acquisitions. Tactical Operationally Strategic These acquisitions are either Consumer Portfolio operationally strat
Slide 103: Building out our verticals
Building out our verticals Our acquisitions complement and accelerate our organic growth. Tech Home Interest Hobbies Organic Acquisition Acquisition Strong organic legacy business Centaur Media acquisition 2017 - Blaze Publishing (2016) establish supported by leading brands. leading brands in Home I
Slide 104: Potential targets are increasing
Potential targets are increasing 142 Deals we have reviewed since Oct 2018. Of which: Consolidation into 76 Strengthen current markets opened up by verticals or are acquisition or organic adjacencies: growth, offers further opportunity. 54 Were in new verticals/wheels Acquisition Playbook 9 Would bu
Slide 105: We are picky
We are picky Reviews in process / yet Over FY19 and FY20 Q1 we to be reviewed have reviewed around 15 Reviewed & Held opportunities to complete on one - we Initial Reviews only execute on the most attractive deals. Detailed Reviews Expert knowledge in the business means we self-generate c 40% of Off
Slide 106: We are operators who add value
We are operators who add value It is a core part of our strategy to buy and build where we identify assets which can add value. Phase 0: Pre-purchase Phase 1: First 4 months Phase 2: 4-12 months Phase 3: 1-2 years Identification Integration Transformation Optimisation Systemised Diligence validation
Slide 107: Review: Purch Close Out
Review: Purch Close Out We delivered on the Purch investment case Delivered Operational Success What did we learn for Investment Thesis next time Double digit earnings enhancing Key sites migrated to vanilla within Combing finance migration with 14 months systems upgrade is challenging Significant gro
Slide 108: A Successful Track Record
A Successful Track Record From April 2016 to September 2018, Future completed 9 acquisitions with a total consideration of £171m Deal Transaction Date Purchase Price Multiple1 Rating - 3 max Noble House April 2016 £0.1m 1.6x Media A mix of different acquisitions with different Blaze Publishing May 2
Slide 109: Acquisition of NewBay Media
Case Study Acquisition of NewBay Media A US based information and events company with a substantial B2B portfolio - April 2018 Historically declining print Complementary B2B brands assets bought for EBITDA facilitating further revenue multiple of c.3.3x. diversification. Acquisition creating a Divest
Slide 110: SmartBrief Acquisition
Case Study SmartBrief Acquisition A US-based digital media publisher of targeted business news and information - July 2019 Opportunity for us to Stable revenue stream of significantly expand our $35.1m pa, which delivers B2B audience with 5.8m $5.0m EBITDA on a TTM new subscribers. pro-forma basis. A
Slide 111: Mobile Nations acquisition
Case Study Mobile Nations acquisition High-growth consumer technology media company based in US - February 2019 MoNa Existing Incremental $m Pro-Forma Purch Impact Total consideration of Purch publisher services sold $115m - 2018 Revenue of advertising on behalf of Mobile Revenue 16.4 -7.2 9.2 $16.4
Slide 112: Barcroft acquisition
Case Study Barcroft acquisition Social media driven video production with key TV & streaming relationships Significant diversification Lean product development through expanded social & process leveraging 60+Million video monetisation social followers to test & lean on prototypes Acquisition Playbook
Slide 113: Acquisition Summary
Acquisition Summary Acquisition strategy Acquisitions to date There is no one deal complements organic have been successful we have to do so can growth strategy to addition to growth. remain disciplined on enter new market or price and have a wide add new capability. pool of opportunity. Acquisition
Slide 114: New Video Revenue
New Video Revenue Sam Barcroft CEO Barcroft Studios 114
Slide 115: New Video Revenue
New Video Revenue a NETWORKS INTERNATIONAL BARCROFT SOS 4 4 FuTURE L r
Slide 116: How we work
How we work Our mission is to inspire the world through amazing true stories. We make, publish and distribute our own We also make shows for others to publish original shows across social media New Video Revenue 116
Slide 117: Business approach
Content Original We are both a video producer AND a publisher - creating value and income on both sides of the aisle. Mass Digital Audience New Video Revenue Business approach 117
Slide 118: Business model
Business model Compelling Content Premium original Consistent flow Grows audience and maintains Of original content and new engagement digital content series 12 original series brands 2 returning linear series New content daily The Barcroft studios Library of 2.5k wholly owned films built over busines
Slide 119: Number one
Number 1 MOST LARGEST YOUTUBE WATCHED PROVIDER OF AWARD UNSCRIPTED SHOWS IN WINNERS SHOW DISCOVER At Future, we focus on being number one. HIGHEST HIGHEST FACTUAL RANKED AVERAGE CHANNEL OF CHANNEL IN VIDEO VIEWS THE YEAR THE NEWS IN FIRST 30 Over the last 12 years of making VERTICAL DAYS video at Ba
Slide 120: How we make money in video
How we make money in video Barcroft Studios has developed a multi-faceted financial approach original video production and distribution. Production Advertising-based Original Digital Revenue Video On Demand Commissions Production Revenue Long-form Short form video content Creation of video content hu
Slide 121: The Barcroft Incubator
The Barcroft Incubator One of the benefits of having 60m+ followers on social is that you get a huge amount of feedback on your shows. Original Content Mass Audience Monetization Making Mad is an original video series brand by barcroft. 68m views Amazing Interiors 73 videos 12 x 30 episodes New Video
Slide 122: We make evergreen content
New Video Revenue We make evergreen content 122
Slide 123: Off Site Video
Off Site Video $35bn $47bn $25bn $24bn $19bn $15bn $11bn $12bn New Video Revenue Advertisers Broadcasters We are highly successful in an expanding global ...and the rapidly growing commissioning market marketplace 123
Slide 124: Off Site Video: Broadcasters
Off Site Video: Broadcasters Currently In paid producing for development for New Video Revenue 124
Slide 125: Off Site Video: Advertisers
Off Site Video: Advertisers The amount of VoD traffic by 2022 will be equivalent to 10 400 New episodes 12 Show brands 4 New OTT billion DVDs per partnerships month. New Video Revenue 125
Slide 126: Off Site Video: Advertisers
Off Site Video: Advertisers We are launching truly, our first scheduled OTT TV channel. truly already has over 2.7 million followers on facebook. The home of popular documentaries. Available across mobile and connected televisions. Featuring Barcroft, Future and third party television shows. New Vide
Slide 127: Video: Moving to scale
Video: Moving to scale Adding Barcroft’s video playbook to Future’s audience at scale, which grows commercial expertise and brand power. We are taking the best Barcroft is a trusted TV supplier Future adds access to audiences, practises and show distribution with 69m+ social followers and a sales an
Slide 128: Global Operating Model
Global Operating Model Penny Ladkin-Brand Chief Financial Officer 128
Slide 129: Global operating model
Acceleration of our strategy via M&A Global operating model is a key element of the platforms which drives Future as facilitates both growth and margin expansion. Future operates a global Focus on organic growth by Playbook methodology allows operating model with a global leveraging the platform for
Slide 130: Global Thinking Teams
Global Thinking Teams Leadership team is focused on where the biggest opportunities are rather than the opportunities in United Kingdom ELT: the local market. Zillah - CEO Penny - CFO Aaron - CCO All teams are set up to service audiences in Kevin - CTO our core markets of US, UK and Australia. Sophi
Slide 131: Scale in our markets
Scale in our markets 31% 40% Our reach of Our reach of people online in males online in the the US. US. Our content reaches 1 in 3 people in the US. 35% 32% Our reach of tech Our reach of enthusiasts in the people online in Global Operating Model US. the UK. 131 Source: comScore Media Metrix Demogra
Slide 132: Scale in our markets
Scale in our markets 43% $70bn of US online Value of US Wine audience use market*** home & We see TI Media as a global architecture sites* opportunity to leverage our platform to target huge addressable markets 71% $37bn of US female Value of global Global Operating Model *comScore, no. of US unique
Slide 133: Our World
Our World We go where our audiences are, which enables us to recruit talent around team hubs. Only those skills that need to be in market are local with centralised centres of excellence. Centralised services are located in the lowest cost location with the UK United Kingdom Central services: France
Slide 134: Strategy is all about execution
Strategy is all about execution Execution of the strategy is facilitated through playbooks to ensure consistency and to onboard new staff. Global Operating Model 134
Slide 135: Measurement provides early warnings
Measurement provides early warnings Operational dashboard provides diagnostic on organisational health; monitors operations pre and post acquisition to make sure we don’t take on too much. Global Operating Model 135
Slide 136: Platform facilitates multiple content uses
Platform facilitates multiple content uses Future’s article types LICENSED EDITION are often evergreen so ANNUAL a single article can be published multiple APP times with multiple INVESTMENT MAGAZINE BOOKAZINE monetisation RETURN LICENSED opportunities. EDITION ARTICLE Global Operating Model ONLINE
Slide 137: More Than One Audience
More Than One Audience User Needs Content Community and Journalism A specialist brand can serve the needs of many audiences. 24% 74% 2% Different audiences engage Fanatics Regulars Mainstreams with our content in Live on our Sites >30 visits per month Visits Often 2-29 visits per month New Visitors
Slide 138: Operating leverage - lifecycle of an article
Operating leverage - lifecycle of an article Evergreen and Initial editorial Editorial monitoring Ongoing editorial monitoring + (Investment) (Payback period) Translation optionality (Incremental revenue) global content leads to increasing margins. US EDITION Cumulative article page Global Operating
Slide 139: Drivers of organic growth
Drivers of organic growth +31% 73%+ (10)% (10)% £121m Media organic audience growth 25%+ FY19 £109m +32% Media organic revenue growth FY19 Global Operating Model +11% Organic growth FY19 Chart shows the reconciliation of organic growth in FY19 and the key drivers; principally ecommerce and digital a
Slide 140: How we report organic growth
How we report organic growth Organic growth is defined as year-on-year growth for the like-for-like portfolio of brands and excludes all acquisitions made in the prior two year period, but includes any closed titles. Definition of We classify revenue classified as “organic” once we have owned an acquis
Slide 141: How they feed into overall growth: Revenue
How they feed into overall growth: Revenue £m 2019 2018 Total Revenue 221.5 130.1 2018 acquisitions 82.5 21.0 +11% 2019 acquisitions 11.7 - In organic growth FX 5.9 - Total inorganic revenue (100.1) (21.0) Global Operating Model Total organic revenue 121.4 109.1 Organic growth +11% 141
Slide 142: Share of total revenue FY17-FY19
Share of total revenue FY17-FY19 60%+ Revenue quality is increasing over time: our fastest growing revenues are our highest margin. 40% eCom and digital advertising revenues operates at a margin premium to other revenue 33% lines. The super-charged growth of eCom revenues drives increasing operating
Slide 143: Operating leverage
Operating leverage 2019 2018 YoY Var Total Revenue: 221.5 130.1 +70% Media Revenue 154.9 66.3 +134% Change in revenue Media GC% 82% 82% - mix brings improvement in Magazine Revenue 66.6 63.8 +4% operating margins. Magazine GC % 62% 62% - Total Gross Contribution 168.6 93.9 +80% 9% Total GC margin %
Slide 144: Operating leverage
Operating leverage Scale brings natural operating leverage 221.5 from cost base. 52% 56% 4% 130.1 45.0 Improvement in admin and 29.1 69.1 direct costs as 44.1 Global Operating Model percentage of revenue FY18 FY19 Revenue Admin costs & other overheads Direct costs Admin costs and direct costs as a %
Slide 145: How they feed into overall growth: EBITDA
How they feed into overall growth: EBITDA 1.0 54.5 4.3 12.4 Focus on quality of 10.2 revenues in organic 5.9 and inorganic 20.7 portfolio provides focus on EBITDA growth. Global Operating Model £m 145
Slide 146: Cash tracks EBITDA
Cash tracks EBITDA We focus on delivering sustainable growth in EBITDA, profitable revenues rather than top-line growth to drive margin expansion Global Operating Model and converting profits to cash. * Free cash flow is defined as statutory operating cash inflow less capital expenditure. ** Net cash is
Slide 147: Multiple growth levers
Multiple growth levers Revenue mix Geographical expansion Central costs Our operating model delivers efficiencies Digital revenue which enable us to streams Core growth optimise our core improves revenue mix business through organic growth and Using our diversified base Continue to leverage acquisitio
Slide 148: Conclusions and questions
Conclusions and questions Zillah Byng-Thorne Chief Executive Officer 148
Slide 149: Appendix
APPENDIX ----REFERENCE SLIDES FROM HERE---- 149
Slide 150: Sources & Definitions
Sources & Definitions Organic ● Organic growth is defined as year-on-year growth for the like-for-like portfolio of brands and excludes all acquisitions made during FY18 and FY19, but includes any closed titles. ● Acquisitions included in organic are: FY17 acquisitions Home Interest, Imagine and Team
Slide 151: Audience Growth
Audience Growth comScore shows our growth Global Online Visits Oct 19 YoY TechRadar +75% Livescience +120% PC Gamer +61% GamesRadar +159% Android Central +51% Space +90% iMore +24% T3 +296% Windows Central +75% Loudersound +159% Top Ten Reviews +51% What Hifi +208% Creativebloq +35% Cyclingnews +337%